Archive: March 2014
Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again. CNN reports:
During the housing bubble, lenders were handing out subprime loans with cheap teaser rates and little or no down payments. Now, lenders are charging interest rates of as high as 8% to 10% and requiring borrowers to make down payments of as much as 25%-35%. The premium price is worth it for some borrowers who are trying to build or repair their credit, according to Bill Dallas from Skyline Financial.
Most of these borrowers have nowhere else to turn. Fannie Mae and Freddie Mac, which back 80% of all U.S. home loans, won’t back loans issued to subprime borrowers. Only the Federal Housing Administration continues to support low-credit score borrowers in the wake of the housing bust. But it has hiked fees and premiums.
Millions of Americans say they want to buy a home this year, but many won’t be able to, according to a new survey from Zillow.
In all but one of 20 metro areas surveyed by Zillow, 5% or more of residents said they wanted to buy a home over the next 12 months. The desire is particularly strong for renters: 10% of them want to buy. That would translate into 4.2 million first-time buyers, double the number who purchased in 2013.
Moving to smaller digs frees you from the cost and time commitment of a house you no longer need, writes Pat Mertz Esswein for Kiplinger’s Personal Finance.
After the real estate bust, many homeowners delayed the decision to downsize until their home regained at least some of its market value. Many more owners are ready to sell now. But clearing out and selling a home, buying a new one and relocating—whether across the street, downtown, out of town or across the country—is a major transition that takes careful planning.